A sixth case has been filed against controversial businessman Deepak Bhatta and 19 others at the Kathmandu District Court over alleged offences under the Insurance Act and money laundering.

The case was registered on Thursday. Five earlier cases involving Bhatta are pending at the Special Court, Patan High Court, and Kathmandu District Court. Bhatta is the main accused in all six cases.

The latest charge sheet alleges that funds from Himalayan Reinsurance and other insurance companies were systematically misappropriated, generating private gains against the state’s losses. It names former Nepal Insurance Authority chair Surya Prasad Silwal, former Federation of Nepalese Chambers of Commerce and Industry president Shekhar Golchha, Upasana Paudel, Subash Kumar Jhunjhunwala, and Sahil Agrawal among the defendants. The case was filed on the basis of a letter from the Nepal Insurance Authority.

Prosecutors allege that eight stages of transactions were used to commit offences under the Insurance Act and money laundering laws.

According to the charge sheet, first, Alliant Insurance Brokers Pvt Ltd withdrew Rs280 million from Himalayan Reinsurance as an advance. Bhatta had established Alliant Insurance Brokers Pvt Ltd in the name of his mother-in-law, Anjana Nepal, while retaining beneficial ownership of the company.

In the second stage, Himalayan Reinsurance committed an insurance offence by embezzling funds and creating financial irregularities through forged accounting to adjust and settle the advance amount of Rs239.2 million disbursed to Alliant Insurance Brokers.

In the third stage, that Rs239.2 million was adjusted as reinsurance brokerage income of life insurance companies in the ledger of Alliant Insurance Brokers. 

The fourth stage allegedly involved forging financial statements by including the misappropriated Rs239.2 million as income of Alliant Insurance Brokers, completing the audit, submitting the details to the tax office, and paying the tax.

In the fifth stage, Rs211.5 million, the amount that remained after taxes were paid on the allegedly embezzled Rs239.2 million, was then deposited into Anjana Nepal’s account as dividend income.

In the sixth stage, that Rs211.5 million was transferred from Nepal’s account at Mahalakshmi Bank to Ayushma Bhatta’s account at Siddhartha Bank. The charge sheet alleges that the same amount was then transferred to Bhatta’s account in the seventh stage. Finally, the amount was transferred from Bhatta’s account to the accounts of Jagdamba Steels, Shankar Agrawal, and Sahil Agrawal. The amount was allegedly used to pay off previously embezzled bank loan amounts.

Prosecutors have sought recovery of the alleged losses, fines and prison sentences for the defendants on charges of misappropriating insurers’ funds, related offences and money laundering. The amount claimed against Bhatta in the latest case is Rs450.7 million.

Bhatta is also under police investigation over his alleged involvement in weapons procurement and banking offences.

Other five cases against Bhatta

The six cases against Bhatta and individuals or companies associated with him are pending at three courts: two at the Special Court, one at Patan High Court, and three at Kathmandu District Court.

The first case against Bhatta was registered at the Special Court on June 11. It accused him and others of laundering money allegedly obtained through the misuse of funds belonging to Himalayan Reinsurance and other insurance companies.

The case named 34 individuals and five companies as defendants, with Bhatta as the main accused. Prosecutors sought Rs26.63 billion in damages from him. They also sought prison sentences for alleged offences under money laundering and insurance laws.

The charge sheet alleged that Rs421.49 million obtained through banking offences was used to increase the paid-up capital of Infinity Holdings, which Bhatta chairs. The money was then allegedly used to buy promoter shares worth Rs450 million in Himalayan Reinsurance as part of a money laundering scheme.

A separate banking offence case was filed at the Patan High Court on June 11 against Bhatta and three others.

The case alleges that Bhatta and his associates carried out fictitious share transactions to concentrate 65.25 percent of Nepal Reinsurance Company’s shares. To do so, they allegedly misused funds belonging to public companies to purchase 14,013,352 shares, totalling Rs4.7885 billion.

The case seeks Rs421.49 million in damages and names four defendants.

A third case was filed at the Kathmandu District Court against Bhatta and 41 others over the alleged misappropriation of Rs3.733 billion from Himalayan Reinsurance and its subsidiaries.

The charge sheet alleges that Bhatta and people close to him illegally invested insurance company funds in the share market and failed to return the money. An investigation by the Securities Board of Nepal also found that the funds had been used for such investments, according to the source report.

Another case was filed over the alleged misuse of loans obtained by Jagdamba Steels, part of the Shankar Group, from various banks. Bhatta, Shankar Agrawal, Sulabh Agrawal, and Sahil Agrawal were among those named as defendants.

The case alleges that funds disbursed to Jagdamba Steels, including loans lent by Nepal Investment Mega Bank, were misused in collusion with the company. A total of 81 defendants were named, and prosecutors sought Rs4.7885 billion in damages from Bhatta.

On July 16, prosecutors filed a supplementary money laundering charge sheet at the Special Court against Bhatta, former finance minister and CPN-UML vice-chair Bishnu Paudel, and 14 others.

The other defendants included Rishiraj More, Sulabh Agrawal, Shubhi Agrawal and Umesh Basnet.

The charge sheet alleges that Bhatta and others worked with Paudel to facilitate disputes involving other businesspeople and obtained benefits that were subsequently laundered. It also alleges that they acquired high-value shares in Shriram Tobacco Pvt Ltd at below-market prices and used the transactions to conceal proceeds of criminal activity.

The amount claimed in that case was Rs262.57 million.